It isn’t easy… but the payoff will be tremendous if you play your cards right. There’s one key step most people forget, though.
By Eric Porat — online entrepreneur, investor, and digital marketer with over 15 years of experience in buying and selling websites.
Building an online business from scratch isn’t easy. There are dozens of steps and processes to take into account, but perhaps the most important stage is researching your target market.
The truth about building an online business is that most people don’t do proper research before they dive in.
If you do in-depth research to analyze the market, you WILL not fail.
Or at least… it’ll be really hard to fail.
One thing that needs to be said. Even if your products appeal to a large group of people, it doesn’t make sense to market to everyone. You need to identify your target market, the specific demographic of consumers you want to appeal to.
First things first, we need to establish the need for your product or service. You can do that simply by focusing on what problem the product or service solves. If your product or service is new on the market, you’ll want to analyze your competitors to gain additional insights.
The critical mistake many folks make here is this. They make ASSUMPTIONS about their consumer. Even if you think you’re an expert in your market (and you should be, if you’re running an online business selling products in that market) don’t assume you know what the consumer knows.
They may not be as plugged in as you are. Don’t fill in the blanks. Engage with your potential customers and conduct as much research as possible so you can know things about your target demographic for certain.
Remember: target market is dynamic
Target markets are always evolving and changing form. For example, maybe right now you’re selling specifically to men, but soon you’ll be selling to women who are shopping for their boyfriends and husbands as well. Constantly refine your target market. Constantly.
One great tip is to create customer profiles. Consumers who find your product or service appealing will usually share characteristics. This can be basic demographic criteria like age, race, location, gender, income level, education level, occupation, religion, and so on. To go a bit deeper, you should add psychographic criteria like hobbies, values, behaviours, and so on. For example, if you’re selling video games, your target market is likely to be younger, slightly male-dominated, and so on. This is super helpful when deciding what you want to target with paid media, social, and email campaigns.
Don’t be afraid to BE SPECIFIC. Sometimes it can be helpful to even create a specific avatar or profile of your average customer.
For example, your target audience could be Jenny, a 35-year-old, married, stay-at-home mom with two kids and a household income of $100,000. She spends money more on material goods than experiences and is particularly concerned with interior design. She is more active on Facebook than other social platforms… and so on and so forth. You get the picture.
If you have a specific customer profile like this, it can make it much easier to brainstorm any marketing campaigns, because it seems like you’re targeting a person not a group of people. It simplifies things.
Remember, don’t be afraid to be specific. Any given niche, if you hit it right, will be more than enough to boost you to success. Identifying a specific target audience ensures that you make decisions dictated by your customers. This sets you up for long-term success.
It’s important to not just stop with the basics like age and income. Really try to understand your audience’s beliefs and attitudes towards various products and markets, as well as their pain points. This will set your products/services a step ahead of any competition.
Next, make sure to ANALYZE THE COMPETITION.
Ask questions about your competitors. Who are they? What are customers buying from them? What are their prices like? What are their customers willing to pay for their product or service? Would their customers pay more if you offered something extra?
One easy way to undercut your competition is to look at their product reviews. Product reviews are where unhappy customers come to vent, so if you look at them closely, you can find ways to improve upon your competitor’s product or service, and then BOOM, before they know it, you’ll have stolen their consumer base.
Are there any weaknesses you can identify from their reviews that you may be able to address with your business?
Of course, if your competitor is absolutely crushing it, maybe you don’t want to go into their market. Don’t be afraid to pull the plug and re-target. There’s no sense wasting money going down a path when someone else already has the market locked down. If you can’t identify a weakness or loophole, it may be time to reposition.
There are a few other steps that can be super helpful, too. Conducting primary research is perhaps the most important. Primary research is when you go talk to the consumer firsthand and figure out what they think. You can do this by distributing surveys, conducting interviews, and assembling focus groups. Obviously, this is much more time-consuming and costly than the other options but a bit of targeted primary research can go along way.
This isn’t everything you need to know to research your target market, of course, but it’s a start. The important thing to remember is that building an online business isn’t easy, but CONDUCTING RESEARCH ON YOUR TARGET MARKET will give you the platform you need to succeed!